Health Care In Cayman - 18 Million Reasons To Worry

Hey everybody – look! The health care system is in the crapper!

Surprise, surprise, surprise… the HSA and CINICO continue to be the biggest financial mess and are the combined recurrent budgetary abortion for the government with projected deficits of nearly $18million for 2008 according to a Caymanian Compass page one story on Monday.

Are the HSA and CINICO board members and staff asleep at the wheel, lazy or just embracing an attitude of defeat?

I’m going to go ahead make a comment here regarding the HSA and the term “acting” CEO: Someone – and I don’t care who that someone is – needs to stop “acting” like a CEO, sprout a pair of nuggets and actually BECOME a CEO.

Eighteen million dollars lost – projected. It could be worse; and based upon historical performance it probably will be.

Eighteen million dollars - wasted.

If there are 50,000 people in Cayman that equates to $360 for every man woman and child – wasted, lost, pissed away… gone. Gone because people aren’t doing their jobs.

What’s happening now with the HSA and CINICO is “stupidity” defined. Stupid – 1) repeating the same act and expecting a different result; 2) – consistently putting unqualified people into positions of authority in the HSA and CINICO and expecting both entities to suddenly heal themselves.

So what’s the answer?

“Acting” CEO Lizzette Yearwood and the HSA geniuses had the great idea to raise the fees charged for services rendered and decided as well to not fill certain vacant positions (some possibly doctors and nurses) at the hospital. So basically she’s proposed cutting the hospital’s operational capacity and raising prices; and she’s completely missing the obvious.

Even though the words came from her mouth, Yearwood ignores the most obvious culprit of the financial disaster. Here’s the quote from Monday’s story: “The system currently covers all civil servants, their spouses and children, and pensioners at no cost to those who are covered.”

“At no cost” – there’s the problem.

Stay with me here. Let’s assume there are 3,000 civil freeloaders and half of the 3,000 are covered under the government’s “at no cost” health plan as employees alone and the other half for full family. At a conservative estimate of $250 per month in premium for the employees and $500 per month premium for the families (which is grossly understated), the premium generated by civil servants alone would be $13.5 million per year.

Based upon actual distribution of plan participants and dependents, and plan costs, this $13.5million would more than likely increase significantly and would surpass CINICO’s deficit.

Add to that the requirement that civil servants pay deductibles and coinsurance and the HSA could actually begin seeing a more robust revenue stream from the population that is the number one user/abuser of the “at no cost” scheme.

By making civil servants financial stakeholders in the system we’ve generated premium dollars for CINICO and a revenue stream for the HSA. And all by doing nothing more than asking civil servants to do the same thing we do – pay their fare share.

Will this completely remedy the comedy of errors now playing out every day in Cayman’s health care theatre? No; but it will work better and more economically than cutting staff and raising fees because doing so doesn’t necessarily cut costs in the long run.

“Why not?” Well I’m glad you asked. Consider the following:

If you cut staff you reduce normal payroll but increase your overtime exposure. If you reduce staff you reduce the number of man hours available without reducing the work load, which means you are forced to pay overtime to adequately deal with the existing workload or you are forced to keep your doors open and lights on longer to complete a day’s work.

OR you screw the patients, shut the doors and force them to the emergency room at significantly higher costs to them and the insurance company. This may save the HSA money in the short term, but it will screw the patient on provision of care AND cost. But hey – it’s easy to do. Am I the only who can see the writing on the wall here?

So, let’s increase the fees. Hmmm… If you increase the fees you generate more accounts receivable – but the trick is turning the accounts receivable into revenue; something the HSA has proven entirely incapable of doing especially given the old Caymanian adage of “you can lead a man to the HSA but you can’t make him pay.”

Further, if you increase the fees then the patients’ insurance companies either a) pay the increased fees submitted by the HSA or b) pay the standard fees in accordance with the law and the HSA is left billing the patient for the balance – which leaves outstanding A/R on the books and doesn’t have the intended affect (shocking, I know).

Don’t let people like Lie-zette Yearwood convince you that by firing a few porters and raising fees the problem will be solved, because it won’t. If the HSA raises its fees we all know who pays those increased fees, and it isn’t CINICO, the civil servants, or the “underserved” population of Cayman.

And don’t let Gordon Rowell fool you into thinking that the solution is as simple as, “We have to address changing demographics.” I gotta tell you Gordon – if you guys haven’t already addressed “changing demographics” we’re all screwed.

Demographics won’t generate non-government subsidies for CINICO; proper management of the HSA and CINICO will. Demographics didn’t put the health care system in the toilet; foolhardy political myopia got Cayman into this position.

Demographics didn’t create the laws that burden Cayman with a restrictive, expensive and unsustainable health insurance industry/product: foolish and ignorant politicians did. Change THAT.

Demographics didn’t continually allow the HSA to be mismanaged and to continually underperform from a service standpoint AND a financial standpoint: foolish politicians did by appointing unqualified people to positions of authority and allowing those people to ruin the hospital. Change THAT.

Demographics didn’t forbid insurance companies from free and open competition within the Cayman insurance market: a pissed-off minister with a bad attitude and an axe to grind did. Change THAT.

Demographics has nothing to do with the fact that more than 10% of the Cayman population pays not one penny toward the cost of their health care – and the government and paying customers/patients end up bearing the cost. Change THAT!

We don’t need to address “changing demographics” we need to address changing the philosophy. We need to address changing the cost metrics. We need to address changing the leadership dynamic. We need to address changing the administration structure of both the HSA and CINICO.

The only demographics that need changing are the demographics of both boards – so Gordon, my mistake. You are correct. Regardless - blame increasing health care costs on Cayman's demographics or the global economy if you must, but the $18,000,000 deficit is the sole result of poor policy; and those in charge should be sacked yesterday.

I’ve said it many times before and I’ll say it again: the HSA board is entirely incapable of running a hospital and the latest bailout and potential staff cutback and fee increase is irrefutable proof. And as a result of pathetic HSA management, CINICO is forced to rely upon the government’s retarded and bankrupt step-child for revenue.

The hospital needs professional management – period. CINICO is in very capable hands with Gordon Rowell but even he is incapable of turning crap into gold (if you don’t believe me, play a round of golf with him).

Regardless (and all due respect to Gordon), this has nothing at all to do with “changing demographics” and everything to do with changing the paradigm from one of well-intentioned ignorance and systemic stupidity to good governance and fiscal responsibility. People need to swallow their pride and admit that they are wholly unqualified by education, experience and training to run a hospital. Then they need to hire the right people to do the job and LET THEM DO IT. Finally, they need to include all gainfully employed participants in the financial responsibility of health care.

There are 18 million reasons why Cayman needs to disband the HSA board and turn the hospital over to a professional management company; and there is one reason why it will never happen: Fear. No one is strong enough to make the right decision to fix the boards and force civil servants to be financially engaged in the provision of all aspects of their health care.

And the two people who would have (Michael Elliot and Craig Brown) were fired NOT because they weren't doing their jobs, but because they did their jobs correctly and people's feelings were hurt. I have two words for the HSA and CINICO - boo freaking hoo.

Eighteen million dollars knowingly, consciously and willfully flushed down the toilet. Suddenly two dudes making out at Royal Palms seems pretty insignificant.

Comments

[J. Flatley]

Making civil servants/pensioners pay health care premiums sounds like a great idea. Until you start thinking, that is.
Their salaries are calculated to include the cost of healthcare. As not all 3,000 use the system every month this represents a substantial saving for government. The private sector sets salaries to include health care costs.
If you made civil servants pay monthly premiums you would need to increase their salaries,at a substantial cost to government,which would mean more taxation on the public to make up for the shortfall in revenue, unless you wanted to in effect cut salaries across the board to "fix things"?

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EXCELLENT POINT. IT'S MUCH BETTER TO SIT BACK AND LET FISCAL IRRESPONSIBILITY AT ALL LEVELS RUN ITS COURSE.

I DIDN'T SAY THE MOVE WOULD BE EASY, I SAID IT WOULD BE FAIR. ASK ANY CIVIL SERVANT HOW MUCH IT COSTS TO PROVIDE THEM HEALTH "INSURANCE" AND THEY WILL NOT BE ABLE TO TELL YOU. THEY HAVE NO SENSE OF COST AND NO SENSE OF VALUE - AND NO SENSE OF WHAT THAT EFFECT HAS.

I HAVE SEEN THE DATA. IF YOU KNEW HOW MUCH THE GOVERNMENT IS BEING BILLED FOR CIVIL SERVANTS AND THE "UNDERSERVED POPULATION" YOU WOULD FLIP. AS FAR AS UTILIZATION IS CONCERNED, THE ACTUAL UTILIZATION BY THIS POPULATION WOULD BLOW YOU AWAY SO DON'T THINK FOR ONE SECOND THAT NEARLY 4,000 CIVIL SERVANTS AND THEIR FAMILIES USING THE SYSTEM ISN'T SIGNIFICANT OR COSTLY.

SAVINGS? NO PREMIUM + NO COST SHARES + NO UTILIZATION REVIEW/CONTROL DOES NOT EQUAL "A SUBSTANTIAL SAVING FOR THE GOVERNMENT" ESPECAILLY WHEN CIVIL SERVANTS GO TO OTHER COUNTRIES FOR CARE WHERE FEES FOR SERVICES ARE NOT NEGOTIATED AND NOT ALWAYS ON PAR WITH LOCAL PROVIDERS.

I WOULD ARGUE THAT HAVING CIVIL SERVANTS ACTUALLY PAY THEIR PROPORTIONATE SHARE OF PREMIUMS AND COST SHARES WOULD NOT RESULT IN "MORE TAXATION TO MAKE UP FOR THE SHORTFALL" BUT WOULD, INSTEAD, REDUCE THE SHORTFALL AND THE NEED FOR CONSTANT GOVERNMENT BAIL-OUTS.

IT WOULD CALL FOR A RESTRUCTING OF THE CIVIL SERVANT'S PAYROLL PROCEDURE - THE DECISION WOULD BE TOUGH, AND TOUGH DECISIONS AREN'T ALWAYS POPULAR; AND IT IS AN IDEA THAT GOVT HAS BEEN TOYING WITH FOR A WHILE. BUT MAKING THE TOUGH DECISION TO (ACCORDING TO THE GOVT'S MANTRA) "LEVEL THE PLAYING FIELD" WOULD RESULT IN AN HSA AND NATIONAL INSURANCE COMPANY THAT WOULD STAND A MUCH BETTER CHANCE OF ACCOMPLISHING THEIR GOALS OF BEING REVENUE GENERATORS AND NOT CASH FURNACES.

JUST SO WE'RE CLEAR, I MENTIONED NOTHING ABOUT PENSIONERS OR INDIGENT OR THE "UNDERSERVED" PAYING PREMIUMS. ONLY THE GAINFULLY EMPLOYED CIVIL SERVANTS.- rtm

I knew the former CEO Craig Brown pretty well, and was given the inside scoop of what went on at the HSA during his nano-second stint at the hospital.In his opinion, the biggest problem was the incessant meddling by the HSA board, especially that dictatorial buffoon, "Pastor AL". The learned Pastor, with no formal education or training in ANY health care related discipline (or anything else for that matter) treated the hospital management like retarded underlings and under his brilliant guidance, ran yet another CEO out of town.

There is a culture of maintaining Caymanians in prominent posts in the hospital, without having the necessary qualifications and/or work ethic to do the job. All Craig tried to accomplish was **gasp**, provide an honest set of financials and cutback on useless administrators to bring the burn down. The problem was targeted cuts were of course Caymanian, and Craig got into a pissing match with Pastor Al, learning the hard way that you can't fire Caymanians no matter how useless or incompetent, especially those who are related to politicians. The HSA doesn't require an efficient operation, hence why hire a competent CEO in the first place?

Craig obviously didn't get the memo in time about dealing with the locals.
When I found out what happened with That Gomez lady I was shocked, I saw the writing on the wall well before Mr Brown was given his walking papers. Post-mortem, We collectively asked him "WHAT THE HELL WERE YOU THINKING TRYING TO FIRING A SLEW OF CAYMANIANS"? Any ex-pat living here few years learns pretty fast the culture of "NO-CAN-DO" when canning a Caymanian.

All we have now is a "tow--the-line" collection of dullards that will continue to bleed the country dry with no coherent solutions. Pretty sad there is so much apathy, I guess when you pay next to nothing for your social programs, Caymanians don't give a toss about monstrous hospital operating losses as long as uncle Bodden still gets his dialysis for free.

________

SPOT-ON MY FRIEND. AND IN THE END THE HOSPITAL GOES FARTHER IN DEBT BECAUSE THERE IS NO REVENUE TO SUPPORT IT. THANKS FOR THE COMMENTS. - rtm

[lm]

My two cents.....the previous Minister of Health put in place CINICO for the right reasons but ignored the math and the concept of insurance. We cannot operate what is referred to as an insurance company that covers people that cannot get insurance, the elderly who need it most, and 3,000 Gov't workers who don't have a cost sharing mechanism and who utilize the hospital every time they sneeze. In order for CINICO to work, we need a larger demographic of healthy individuals’ premiums to offset the one's that CINICO was set up to cover. CINICO should change its focus and operate like a commercial insurance company giving all the options available by an Aetna ect. They would then get a large young healthy demographic to off set the bad. Further, if it was done on this basis, kind of like a national plan, it would solve the portability of cover issue as well as the issue of being dropped or denied cover. With all this said, HSA/Gov’t would then worry about hospital income since currently all CINIC clients have to use the hospital. Well, I strongly believe that this would work out in the end since there is always a need for a Hospital.